Still using Excel to calculate your distribution waterfall? You are not alone. In the latest in our Secret CFOs series, we asked some finance chiefs about the way they do it. The recurring theme was: “We’ve thought about it, tried it even, but have returned to Excel.” The problem with automation, agree our CFOs, is that variations between investors and vehicles add too much complexity. Says one: “In essence, there could potentially be a different waterfall for basically every LP.”
Is it right that complexity prevents automation? This is something we will be exploring in detail towards the end of the year in a special supplement on the subject. Stay tuned for that.
In the meantime, here are a list of providers of solutions who will no doubt differ with our CFOs’ opinions.
Robo accountants and advisers
For those with a deep interest in a running topic for us – automation – this 58-page paper from data room provider Drooms and the UK accountancy body the ICAEW gives some perspective on how professional services firms and corporate transactions will be affected by artificial intelligence. If you don’t have time to read the full 58 pages, perhaps just consider this one view from KPMG’s AI chief Shamus Rae: “Professional firms sell into clients a pyramid of staff. Automation will take out the bottom two tiers and that’s where a lot of the profit comes from.”
Email prepared by Toby Mitchenall